What is the pandemic tax filing deadline issue?

A U.S. court in Kwong v. United States read Section 7508A(d) to automatically postpone federal deadlines during COVID-19 disasters from January 2020 to July 2023. If that view holds, some penalties and interest charged in that window may be invalid, creating a possible path to refunds or abatements after appeals conclude.

Who could claim IRS penalty refunds under this ruling?

Potentially U.S. taxpayers and businesses that were assessed late-filing or late-payment penalties, or interest, tied to deadlines between January 2020 and July 2023. Eligibility depends on facts and the final outcome on appeal. State taxes are separate. Taxpayers should review IRS transcripts, notices, and payments with a qualified adviser.

What are the timing risks for refund claims?

Appeals could narrow or reverse the ruling, and standard U.S. refund limits apply, often three years from filing or two years from payment. Taxpayers may file protective claims to keep rights open. Do not book recoveries as income until the IRS or courts provide clear, final guidance on eligibility and scope.

Why does this matter to investors in Germany?

If upheld, refunds or abatements may lift U.S. consumer cash flow and near-term spending. German exporters and consumer brands with strong U.S. exposure could see support for orders and margins. The impact remains a probability-weighted scenario until legal clarity arrives, so we track guidance and sales trends before changing base cases.

Global Market Insights

February 20: Pandemic Tax Filing Deadline Ruling Could Mean Refunds

ByDanny Kontos February 20, 2026February 20, 2026

A recent U.S. court decision tied to the pandemic tax filing deadline could reshape penalties and interest from January 2020 to July 2023. In Kwong v. United States, the Court of Federal Claims read Section 7508A(d) as an automatic postponement. If that view stands, IRS penalty refunds may follow for many taxpayers and firms. For investors in Germany, this matters because U.S. consumer cash flows and earnings guidance could shift. We explain the case, the risks, and the signals to watch now.